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Topic Foreword 1.0 Foreword 2.0 Acknowledgements Reality Check Introduction There is a shortage of candid and straightforward information for entrepreneurs and would-be entrepreneurs I grew frustrated with the shortcomings of blogging These two forces inspired me to publish Reality Check Reality Check is a tweaked, updated, and supplemented compilation of the best of everything I've done The Reality of Starting Flounders (sic) at Work Stories about the Reality of Starting an Organization James Currier (Tickle) Catarina Fake (Flickr) Paul Graham (Viaweb) Ann Winblad (Open Systems and now venture capitalist) Tim Brady (Yahoo!) Mitch Kapor (Lotus Development) Chuck Geschke (Adobe) James Hong (Hot or Not) These stories depict what happens in startups The Problem with Serial Entrepreneurs Serial entrepreneurs try to prove that their first success wasn't a fluke Serial entrepreneurs cannot distinguish between causation and correlation Serial entrepreneurs use the same methods again Serial entrepreneurs use the same people again Serial entrepreneurs don't (or can't) work as hard as before Serial entrepreneurs don't get smacked around enough Serial entrepreneurs fill new roles in their next companies "The Banality of Heroism" The Inside Story of Entrepreneurship Top Ten List of Startup Realities 1. True believers go nuts at the slightest provocation 2. Good people need big projects 3. Startups are freak-catchers 4. Good code takes time 5. Everybody has to rebuild 6. Fearless leaders are often terrified 7. It's always hard work 8. It's not going to get better—it already is 9. Truth is the only currency 10. Competition starts at $100 million Starting a new business is difficult and scary The Art of Intrapreneurship What you have to do to succeed as an intrapreneur Kill the cash cows Reboot your brain Find a separate building Hire infected people Give hope to the hopeless Put the company first Stay under the radar Collect and share data Dismantle when done Conclusion The Art of Commercialization Mission Impossible—Unrealistic Conditions Four Flaws in Most Attempts to Commercialize Technology via a Startup It's not easy to productize technology and start a company An effective strategy for a company is not "patent, sue, collect" The value of technology is not directly related to how long it took to develop it For most organizations commercialization isn't about doing good Conditions Necessary for Commercializing Most Technology The right attitude A product or a tactical path to a product Warm bodies A hands-off attitude Another Alternative—The Lone Wolf Mantras for Dummies Mantras Defined The Typical Mission Statement Development Process Day 1: Teambuilding Day 2: Crafting the mission statement Creating a Mantra The Test of a Mantra Dilbert Mission Statement Generator The Reality of Raising Money The Investor Wish List First, Don't Confuse Fundability With Viability Second, Don't Ask Any Potential Investor to Sign a Nondisclosure Agreement (NDA) Characteristics of a Fundable Proposal Realness Traction Cleanliness Forthrightness Enemies In Everything That You Say, Ensure That Your Results Exceed Expectations The Art of Getting the Attention of Investors The Art of the Introduction Get an introduction by a partner-level lawyer Get an introduction by a professor of engineering Get an introduction by an executive of a company in the investor's portfolio Send a short email The Art of Executive Summary The components of an effective executive summary Document criteria These are more recommendations to help you create a masterful executive summary Craft a compelling subject line Do not attach a presentation Do not use the word "patented" more than once Do not claim that you're in a multi-billion-dollar market Do not claim you'll create the fastest-growing company in the history of capitalism Do not brag about an MBA degree Do not try to create the illusion of scarcity The 10/20/30 Rule of Pitching 10 Slides 20 Minutes 30-Point Font Using Pitching Beyond Fund-raising The Top Ten Lies of Venture Capitalists 1."I liked your company, but my partners didn't." 2. "If you get a lead, we will follow." 3. "Show us some traction, and we'll invest." 4. "We love to co-invest with other venture capitalists." 5. "We're investing in your team." 6. "I have lots of bandwidth to dedicate to your company." 7. "Do you mind if one of our associates accompanies me to your board meetings?" 8. "This is a vanilla term sheet." 9. "We can open up doors for you at our client companies." 10. "We like early-stage investing." Translations The Top Eleven Lies of Entrepreneurs 1. "Our projections are conservative." 2. "(Big name company) is going to sign our purchase order next week." 3. "Key employees are set to join us as soon as we get funded." 4. "No one is doing what we're doing." 5. "No one else can do what we're doing." 6. "Hurry, because several other venture capital firms are interested." 7. "Oracle is too big/dumb/slow to be a threat." 8. "We have a proven management team." 9. "Patents make our product defensible." 10. "All we have to do is get 1 percent of the $x billion market." Investor Responses & Your Reaction to These Lies The Art of Raising Angel Capital Ensure they are "accredited" investors Make sure they're sophisticated investors Don't underestimate them Understand their motivation Enable them to live vicariously Make your story comprehensible to a spouse Sign up people they've heard of Be nice For more information about angels Think optimistically The Inside Scoop on Venture Capital Law Can I start a technology company in the same business as my current employer? When should I incorporate? Why don't I use a Limited Liability Company (LLC), because it is cheaper to start? Why does everyone incorporate in Delaware? Should we incorporate as an S corp or C corp? Should I incorporate offshore if my business will focus on China or India? Can I have everyone in my startup be contractors or consultants How can I grant stock options to employees and consultants? How does the corporation obtain ownership of the technology and IP from each of the founders … Can I hire people away from my former employer? Can I file a provisional patent application myself? If we have been issued a patent, won't that stop a Microsoft from copying us? Shouldn't prospective investors sign nondisclosure agreements (NDAs) so that they don't rip off our If my buddies and I own more than half of the corporation, don't we control it? Why should founders vest?—we've already been working on the business for two years Why does it cost $50,000 or more to do a round of financing? Greguras has kindly answered the most common questions that entrepreneurs ask their attorneys The Top Sixteen Lies of Lawyers Your company will get my personal attention We'd like to invest in your company, too We can work on the billing so that you pay us when you get financed I'll have that to you by the end of the day Don't worry about the date on that option grant; it's not a big deal The bill would be lower if it weren't for the lawyers on the other side I thought you were more interested in getting it right rather than saving a few dollars Your case is much stronger than theirs We have relationships at the highest level in Shanghai/Munich/ Mumbai/New York/Los Angeles We'd much rather be on the company side than on the investor side We usually don't bill the full retainer; it only happens if there are unforeseen issues that come up Sure we're busy, but I'll make sure you don't get handed off to a green associate I've done work with Google/Microsoft/Apple, so I know how to structure deals with them We think you will have a very strong patent We know the opposing attorneys, so we'll be able to work out something quickly and cheaply I can call several venture capitalists to help you secure funding Caution: They will lie to you The Venture Capital Aptitude Test (VCAT) Part I: Work Background Part II: Firsthand Experience Part III: Necessary Knowledge Results The Reality of Planning and Executing The Paradox of Strategy: How Apple Blew It and Microsoft Got Lucky Why did Windows kick Macintosh's butt and VHS kick Beta's butt? So Apple and Sony didn't do anything wrong per se? What is the explanation for Toyota's success? You make it sound confusing: damned if you do, damned if you don't—what's a company to do? Why can't companies predict the future better? But what if there was a system that was self-contained and orderly? What's the proper role in strategy formation for each level in a hierarchy? Board members should ask CEOs should ask Divisional or business-unit vice presidents should ask Managers should ask How does your answer change with respect to a startup? Are you saying that by definition a startup should/has to bet the farm on one approach? So if a startup fails … So startups are wrong to simply accept strategic risk? This is what I learned from this interview … The Zen of Business Plans Babson College study The Zen of Writing Business Plans Focus on the executive summary Write for all the right reasons Make it a solo effort Pitch, then plan Keep it clean Limit yourself to a one-page financial projection plus key metrics Write deliberate, act emergent Process recommendation The Art of Financial Projections 1. Underpromise and overdeliver 2. Forecast from the bottom up 3. Don't go beyond twelve to eighteen months 4. Reforecast every three months 5. Don't let costs get in front of revenue 6. Collaborate with your investors 7. Think in terms of per-unit profitability 8. Plan for marketing costs 9. Create a one-page report and stick to it 10. Never miss a cost projection Strategic Decisions and the Communication of These Decisions Determine the Quality of Financial Projections Financial Models for Underachievers Part I: Numbers Rent per Employee per Month Initial Equipment Cost per Employee Monthly Benefits, per Employee Annual Payroll Tax Quarterly Bonus Payout Annual Payroll Increase for Existing Employees Percentage of Candidates for Whom Redfin Paid a Recruiting Fee For Employees Recruited for a Fee, the Recruiting Fee as a Percentage of Annual Salary Incremental Amount Paid to Contractors, as Percentage of Payroll Monthly Travel Costs per Field Employee Monthly Telephone Costs per Field Employee Monthly Legal Costs Annual Accounting Costs All-Company Meeting Cost Part II: Lessons Focus on head count Plan slow, run fast Run top-down sanity checks Forget economies of scale Admit that revenues are a mystery Build with building blocks Take out "hope." Flag your assumptions Hit $100 million in revenues within five years Keep market share under 20 percent How things work? The Art of Execution Create something worth executing Set goals Measurable Achievable Relevant Rathole resistant Postpone, or at least de-emphasize, touchy-feely goals Communicate the goals Establish a single point of responsibility Follow through on an issue until it is done or irrelevant Reward the achievers Establish a culture of execution Heed your Morpheus Either you ship a product and customers buy it, or not After the Honeymoon Problem: A founder isn't delivering Problem: The product is late Problem: Sales aren't meeting projections Problem: Our team is not getting along Problem: We are getting slammed by the press/analysts /blogosphere Problem: Venture capitalists are micromanaging us Problem: Venture capitalists aren't helping very much Problem: Our PR/ad agency is not delivering Problem: We are going to run out of money before we can raise more The Art of Bootstrapping Focus on cash flow, not profitability Forecast from the bottom up Ship, then test Forget the "proven" team Start as a service business Focus on function, not form Pick a few battles Understaff Go direct Position against the leader Don't run out of money The Art of the Board Meeting Board Composition Archetypes The Customer The Geek Dad. Or Mom The Hard-ass Jerry Maguire The CEO Guidelines Start in the morning Get the easy crap out of the way Don't bullshiitake people Let the CEO run the show Be brief Don't surprise people Pre-sell as much as you can Present solutions, not problems Final thoughts How I Built a Web 2.0 … Social-Media Site for $12,107.09 The Reality of Innovating The Art of Innovation 1. Build something that you want to use 2. Make meaning 3. Jump to the next curve 4. Don't worry, be crappy 5. Churn, baby, churn 6. Don't be afraid to polarize people 7. Break down the barriers 8. "Let a hundred flowers blossom" 9. Think digital, act analog 10. Never ask people to do what you wouldn't do 11. Don't let the bozos grind you down These recommendations are so easy to read (or write) and yet so hard to do The Seven Sins of Solutions 1.Shortcutting 2. Blind spots 3. Not Invented Here (NIH) 4. Satisficing 5. Downgrading 6. Complicating 7. Stifling These sins should keep you awake at night, so you should ruthlessly eliminate them from your company The Myths of Innovation The Sticking Point Why didn't you name the book The Sticking Point? What separates ideas that stick from those that don't? If these six principles were all it took to make a sticky idea, why aren't there more sticky ideas? Why has Windows stuck? And other products … Who's in the Heath Hall of Stickiness Fame? Time and again, you hammer on simplicity and core, and yet your jacket copy says … Did Herb Kelleher "know" his core when the first Southwest Airlines flight took off? What is the relationship between stickiness and evangelism? Is there a point in a market where it's impossible to make a new entrant stick? Can a slick marketer apply your principles and make a piece of crap stick, or does the intrinsic value What's your advice to a product champion stuck in a large company who gets matrixed to death trying What does it mean if your book doesn't become a bestseller? SUCCES—I like that acronym, but it would stick better with one more S The Lies of Engineers I don't know anything about marketing We're about to go into beta testing I'll comment the code, so that the next person can understand what I did Our architecture is scalable The code supports all the industry standards We have an effective bug-reporting database and system We can do this faster, cheaper, and better with an offshore programming team in India Our beta sites love it This time we got it right This code is so bad that it would be faster to … I like thinking about architecture, but I can code It works on my machine Of course I can let go of the code and run the business instead Even my mom can navigate the screens I love the lies that engineers tell for three reasons How to Kick Silicon Valley's Butt Stuff You Can't Do Jack About Beautiful, but not gorgeous, surroundings High housing prices Cities and crowds but not overpopulation Absence of multinational companies—especially from the finance industry Life-threatening enemies Stuff You Can Do Jack About Focus on educating engineers Encourage immigration Send the best and brightest to Silicon Valley Celebrate your heroes Forgive your failures Be logical Don't pat yourself on the back too soon Be patient Stuff You Shouldn't Do Jack About Don't focus on "creating jobs." Don't pass a special tax exemption Don't create a venture capital fund Aim higher than merely trying to recreate Silicon Valley The Purest Form of Engineering: Woz The Reality of Marketing Stupid Ways to Hinder Market Adoption Enforced, immediate registration Impossibly long URLs Windows that don't generate URLs Lack of a search function Lack of ways to share an experience Limiting contact to e-mail Lack of feeds and e-mail lists Requirement to retype e-mail addresses User names that cannot contain the @ character Case-sensitive user names and passwords Frictionful commenting Unreadable confirmation (CAPTCHA) codes Enforced, immediate registration-12 Adoption is in the details The Name Game Begin with letters early in the alphabet Avoid names starting with X and Z Embody verb potential Sound different Embody logic Avoid the commonplace and generic Avoid the trendy Check out both the domain and these guidelines The Art of Branding Seize the high ground Create one message Speak English Take the opposite test Cascade the message Examine the bounce-back Focus on PR, not advertising Strive for humanness Will people be aware of our brand and understand what it stands for? Frame or Be Framed Two political questions from the interview How does language influence the terms of political debate? Do any of the Democratic presidential candidates grasp the importance of framing? You either frame your product or someone will frame it for you This is how to control the frame Be true to yourself Avoid the frontal assault Align with core values Draw first blood Then someday maybe Lakoff will write about you Get a Clue: The Global Youth Market What is your methodology for studying trends? Why do MySpace and Facebook appeal so much to young people? How long does a young-people fad last? How different is a young person in … Are companies deluding themselves if they think they can create trends for young people from the top Generally speaking, how does a company build cred with young people? How will young people shop during the next two years? What is your analysis of the following segments for young people? Knowing all that you know, what kind of company would you start in the young-people market? Conclusion The Lesson of Tam's Art Gallery The Reality of Selling and Evangelizing The Art of Selling See the gorilla Sell, don't enable buying Find the key influencers Give customers less information Make prospects talk Disrupt, then reframe Cut the hype Don't use sex Enable test-drives Provide a safe, easy first step Master the art of making it rain The Art of Distribution Separate distribution from virality Allocate responsibility Obey the law of big numbers Look for adjacency Focus on revenue Look out for the other guy Bake a bigger pie—don't slice up the same pie differently Skim the cream, sometimes Distribution deals are very seductive The Art of Evangelism The characteristics of an innovative product or service Deep Intelligent Complete Elegant Emotive If you've created a DICEE product, that hard part of evangelism is done Upon this foundation, you can build an evangelistic approach Love the cause Look for agnostics, ignore atheists Localize the pain Learn to give a demo Ignore pedigrees Don't lie Remember your friends Give them schwag A final thought DIY PR Ten reasons not to hire an agency The truth will set you free The Rolodex is already online You don't have to seem all grown-up and boring Let the fur fly Nerd-to-nerd networks are where it all happens—and value speed in everything you do Even bad coverage isn't so bad Go in alone Make time Hire an employee, not an agency Hire an employee, not an agency-1 Straight from the Press's Mouth How do you pick what to cover? When—if ever—does it make sense for a company to hold a press conference? How many companies or their PR firms pitch you per day? What's the most common mistake that companies and their PR firms make when they pitch you? By contrast, how would you describe the perfect pitch? Do gifts and suck-ups (cookies, T-shirts, flowers, invites to swanky parties) matter at all to you? What is the dumbest thing a company or its PR firm has ever done to get your attention? Has the growth of online readership made you change your reporting style? If a company receives negative press, what should it do? How would you rank the PR expertise (from best to worst) of the following organizations This isn't rocket science Forget the Influencers After All? Don't focus exclusively on the top of the pyramid. Marketing doesn't flow downhill Use mass marketing, because you never know who will be your "accidental influential." Don't worry too much about what the A-list is saying Ensure that your marketing information is comprehensible and credible to moderately connected people Enable these folks to easily take action for you How do these recommendations square with selling, evangelism, and public relations? The Reality of Communicating The Effective E-mailer Craft a subject line Limit your recipients Don't use ALL CAPS Keep it short Refrain from attaching files Don't FUQ (Fabricate Unanswerable Questions) up Ask permission Quote back Use plain text Control your URLs Chill out Add a good signature Never forward something that you think is funny Conclusion The Zen of Presentations How to Get a Standing Ovation Have something interesting to say Remove the sales pitch Customize Focus on entertaining Overdress Don't denigrate the competition Tell stories Pre-circulate with the audience Speak at the start of an event Ask for a small room Practice and speak all the time Summary As Good As Steve Jobs Speaking as a Performing Art Warm up with a towel Just say "Whoooo!" Flutter your lips Eat light, eat protein Allocate three hours to wake up Skip the tea Leave your jaw out of it Circulate with your audience Command attention Snarl Bite your tongue Perform a sound check before you speak Use your eyes all the time Move away from center to make your point Get quiet "Underline" certain words with a pause or repetition Take a risk and be vulnerable Tee it higher Know when it's time to go Use Q&A as an encore Don't overwhelm the audience Rehearse, rehearse, rehearse Perform for a hero Summary How to Be a DEMO God Create something worth demoing Bring two of everything Get organized in advance Reduce the factors you can't control Get to it Cut the jokes and skit Do it alone Do the last thing first Cut the jargon Don't take any questions until the end End with an exclamation point And still most people's demos suck How to Kick Butt on a Panel Know the subject Control your introduction Speak up Entertain, don't just inform Tell the truth, especially when the truth is obvious Answer the question that's posed, but don't limit yourself to it Be plain, simple, and short Fake interest Never look at the moderator Never say, "I agree with the previous panelist." A panel is a good opportunity to stand out How to Be a Great Moderator Represent the audience Make everyone else look smart Don't over-prepare the panelists Do prepare yourself in advance Never let panelists use PowerPoint (or Keynote) Never let panelists use props Make them introduce themselves in thirty seconds Break eye contact with the panelists Involve the audience Seize the day Just remember that your goal is to entertain and inform the audience The Art of Blogging Think "book," not "diary." Answer the little man Collect links for blog rolling Scoop stuff Supplement other bloggers with follow-up entries Acknowledge and respond to commenters Ask for help Be bold Make it easy to join up Summary The Reality of Beguiling The Psychology of Influencing People What is your definition of influence? Who has influence? How do we do that? Are there any ethical concerns surrounding the use of influence to get people to say yes? Six universal principles of influence Three kinds of influence practitioners Bunglers Smugglers Sleuths What's the most important thing in making a request? Please give an example of how to apply one of these principles Why? What is your definition of ethical influence? What are some ways to recognize and construct elusive moments of influence Look at how these principles work as a checklist for sales training The Art of Creating a Community Create something worth building a community around Identify and recruit your thunder lizards immediately Assign one "champion" the task of building a community Give people something to chew on Create an open system Welcome criticism Foster discourse Publicize the existence of the community A community is a beautiful thing The Art of Customer Service 1. Start at the top 2. Put the customer in control 3. Take responsibility for your shortcomings 4. Don't point the finger 5. Don't finger the pointer 6. Don't be paranoid 7. Hire the right kind of people 8. Underpromjse and overdeliver 9. Integrate customer service into the mainstream 10. Don't give them a sales pitch 11. Use operating procedures, not scripts 12. Use operators 13. Use a callback system 14. Keep customers in the loop 15. Make customers feel important 16. Follow up Customer-service largely determines a company's reputation Power 3.0: Kinder, Gentler, and Better Three myths of power 1. "Power equals cash, votes, and muscle." 2. "Machiavellians win in the game of power." 3. "Power is strategically acquired, not given." Here's to zero tolerance and using Power 3.0 to beguile people The Art of Schmoozing Guy's Tips Understand the goal Ask good questions, then shut up Unveil your passions Read voraciously Follow up Make it easy to get in touch Give favors Ask for the return of favors Susan's Tips Think analog, not digital Prepare for every event Determine what you have in common with the other people at that event Prepare a self-introduction Read voraciously Approach the person standing alone Just smile and say hi or hello Make small talk Listen, listen, listen Go everywhere with the intention of having fun World-Class Schmooze Status The Art of Sucking Down 1. Understand the dynamic 2. Understand their needs 3. Be important 4. Make them smile 5. Don't try to buy your way in 6. Never complain 7. Rack up the karmic points 8. Accept what cannot be changed I attribute my good fortune to understanding the art of sucking down The Art of Sucking Up The perfect suck-up contains the following elements Credibility Empathy Utility Gratitude Obligation Fluidity Flattery Suck-up in Action How to Suck Up to a Blogger 1. Befriend as many bloggers as you can 2. Create a great product or service 3. Cite and link 4. Stroke them 5. Give gifts 6. Be responsive 7. Use a rifle, not a shotgun 8. Be a foul-weather friend 9. Be a source 10. Make connections after you need them, too 11. Pitch reporters through their blogs If you want to maximize your marketing, you will need to master the art of sucking up to bloggers The Art of Partnering Partner for spreadsheet reasons Define deliverables and objectives Ensure that the middles and bottoms like the deal Designate internal champions Accentuate strengths, don't hide weaknesses Cut win-win deals Include an out clause Ask women Wait to legislate Partnering with a large company is like being stuck in the belly of a snake The Top Ten Lies of Partners 1. "We want to do this for strategic reasons." 2. "Our management really wants to do this." 3. "We can move really fast." 4. "Our legal department won't be a problem." 5. "The engineering team really likes it" or "the marketing team really likes it." 6. "We want to time the announcement of our partnership with … 7. "Our primary concern is whether you guys can scale." 8. "We'd like your servers to host most of the code and functionality." 9. "We're forming a cross-functional team to ensure the success of this project." 10. "I'm leaving soon, but I've found a great person to take over my role in this project." Despite these warnings, partnerships can work Ten Questions "with" Jackie Onassis Here is an excerpt from the book Coddle bit players Don't (publicly) criticize your enemies or opponents Tap higher powers to help the helpless Turn the other silken cheek Mute the call of mammon Don't gab on about money To be a cut above, don't cut You've got to love Jackie O The Reality of Competing The Art of Defensibility What makes your company defensible? Bad answers: Patents make our business defensible We're the only guys who can do this [Big-name potential competitor] won't compete with us; they'll simply have to buy us out Good answers We know that there are no 'magic bullets' that make us defensible We have filed for patents, but we know that we cannot depend on patents for defensibility We have an x-month head start … We've built similar businesses before We've amassed a ton of relevant domain expertise because … We used to work at [big-name company], so we know it won't be a competitor We've already signed up key customers like [insert the biggest names that you truthfully can] to use A firm like yours will dissuade other firms from investing in competitive companies This is a real business that we think is going to be big It's a race, and we're going to work like hell to reach escape velocity The goal is to paint this picture These explanations will only work on people who already believe in what you're doing Counterpoint: Patents and Defensibility Put patents in the right place How are your competitors using patents? Is your invention better protected as a trade secret? Could making the invention publicly and freely available create greater value for the company? Can placing the invention in the public domain by making a "defensive publication" work for you? Look beyond the value in a legal action Consider the role that inventions will play in your business Get trademarks that are strong and protectable Get the domain name Develop an overall branding strategy for your trademarks, including your domain name The bottom line is The Art of Driving Your Competition Crazy Know thyself Know thy customer Know thy enemy Focus on the customer Turn customers into evangelists Make good by doing good Turn the competition into allies Play with their minds Hannibal once had his soldiers tie bundles of brush to the horns of cattle A pizza company that was entering the Denver market for the first time ran a promotion offering two pizzas for the price of one if customers brought in the torn-out Yellow Pages ad of its competition A national hardware store chain opened up right next to a longtime community hardware store When Security Pacific Bank merged with Bank of America, many Security Pacific branches were closed In 1986 British Airways ran a promotion to give away 5,200 seats for travel on June 10 A research company surveyed 750 white-collar workers around the United States A Goodyear store in Chattanooga, Tennessee, faced a predicament An electrician with only one truck was constantly razzed by his competition because his company was so small International Harvester couldn't get steel to its factory in Melrose Park, Illinois, because of a truck drivers' union strike I love these stories about how companies drive each other crazy, but I don't want you to think that these kinds of actions are the key to driving your competition crazy Above all, focus on making your customers happy so that you are successful How to Remain Sane Delight your customer Don't assume that "perfect information" exists Take a chill pill Hang a negative on your competition Act like a maniac The Reality of Hiring and Firing The Art of Recruiting Ignore the irrelevant Hire infected people Hire better than yourself Double-check your intuition Issue a challenge Check independent references Apply the Shopping Center Test Use all your weapons Sell all the decision makers Wait to compensate Don't assume you're done Final comments Real-World Recruiting Host Technical Project manager Lunch Human resources Technical interview Host (reprise) All candidates would be interviewed in as short a time span as possible End of interview day team meeting—a decision Keep the same members on your interview team Candidates impressed by demanding interviews Unimpressed by casual interview processes Guy's summary Thirteen Questions with Libby Sartain, Chief People Yahoo! At any given moment, how many jobs are you trying to fill? On average, how many applications do you get per job? How can a candidate break through the noise? What makes a cover e-mail and résumé "pop" for you? What do you dread seeing in a résumé? Does a résumé that's over one page long hurt a candidate's chances? How would you rank education, experience, and enthusiasm as desirable qualities of a candidate? How do your criteria differ from other Silicon Valley companies, like Apple or Google? What's the effect of a candidate saying that she wants to help Yahoo! kick Google's butt? How can candidates increase the probability of a great interview? Can an art history major with no technology background get a job at Yahoo!? If a candidate doesn't hear back, at what point should she try to initiate contact? By approximate percentages, how do successful candidates for non-officer-level positions come to you Guy's comments Career Guidance for This Century How much money does it take to be happy? Is it more important to be competent or likable? Should I sue a boss who is sexually harassing me? When should I ask for a promotion? Is being a generalist or a specialist the path to the executive suite? What do I do about the gaps in my résumé when I traveled or couldn't find a job? Will getting an advanced degree be a good use of time and money? What's the ideal length of a résumé How should I prepare for an interview? What's the right strategy for the search for a first job out of college? Do only losers live at home after college? What should I do if I work for a jerk? The Nine Biggest Myths of the Workplace You'll be happier if you have a job you like Job hopping will hurt you The glass ceiling still exists Office politics is about backstabbing Do good work, and you'll do fine You need a good résumé People with good networks are good at networking Work hard and good things will come Create the shiny brand of you! You are responsible Everything You Wanted to Know About Getting a Job in Silicon Valley But Didn't Know Whom to Ask Love what the company does Create a solid pitch and bring it with you Here's the 1/2/3 Rule of Résumés 1 page long 2 key points 3 sections Additional résumé tiplets Bring copies of your résumé to the interview Know—or better yet—dislike the competition Expect the funny farm Show up early Overdress or ask what to wear Answer the first question, "How are you?" with a great response Get the scoop from the first interviewer Take notes Confess your sins Retract your mistakes Prepare five ways that you think the company could improve Provide references on the spot Tell the interviewer you see a good fit and want the job, if this is the truth Remain flexible and humble about the job you'll take Nine Questions to Ask a Startup 1. How many outstanding shares of stock are there? 2. What is the monthly burn rate? 3. How much cash is in the bank? 4. When will the company achieve positive cash flow? 5. When will the product ship? 6. May I talk to any of the outside investors on the board of directors? 7. May I talk to several beta sites? 8. How much of a "liquidation preference" do the investors have … 9. Are there any intellectual property issues or lawsuits pending? Finally, a word of caution How to Get a job on craigslist Apply fast Write a cover e-mail that addresses the position Rise to the occasion Apply well Apply really well Don't be stupid Summary How to Not Hire Someone via craigslist Flawed ad example This is my advice to employers Sell Use the right tool Write accurate job descriptions for honest job titles Match job and background requirements Give young people a break Describe what you really want and what you will really pay The Effort Effect of Carol Dweck People have either "growth" or "fixed" mind-sets Tips for your children Listen to the mind-set messages you're sending Focus praise on the child's process Feedback that helps the child understand how to fix the problem, rather than labeling or excusing Pay attention to the goals you set for your children Parents love them unconditionally The inexorable march toward mediocrity of many great companies Since childhood, these people have been told they're the best Employees develop a fixed mind-set that they're the most talented Now people don't take risks, because failure would harm their image of being the best … Focus on the process worth ethic The Art of Laying People Off Take responsibility Cut deep and cut once Move fast Clean house Whack Teddy Share the pain Show consistency Don't ask for pity Provide support Don't let people self-select Show people the door Move forward Focus remaining people on goals Make yourself visible The Art of Firing Consult impartial people Get professional advice Search your soul Give people a second chance Document everything Do it yourself Be firm Don't be guilted into anything Show people the door Don't disparage the victim Concluding comments The Reality of Working Work as a Prison? Q: What is the sequence of events of the Stanford Prison Experiment? Q: How did the experiment come to an end? Q: How would you apply what you learned to what happened at Abu Ghraib? Q: Is there a difference between "good commanders/professors" letting something bad happen? Q: How would you allocate blame to the three factors of … Q: How would you reengineer the system to prevent a reoccurrence? Q: Are people inherently and consistently good or bad? Q: What makes people go wrong? Q: How does a person resist undesirable influences? Action conclusions How to Not Choke Avoid negative people Invoke positive stereotypes Frame, or reframe, yourself Or Never try anything Mavericks in the Workplace Q: What's the difference between a maverick and a jerk? Q: "Maverick humility"? That sounds like a contradiction in terms Q: What's your assessment of Steve Jobs? Q: Are mavericks born or made? Q: How does gender play into maverickdom? Q: How does a maverick survive, much less thrive, inside a … Q: Do mavericks drive out bozos or do bozos drive out mavericks? Q: What's the difference between open-source innovation and listening to the customer? Q: What's the best idea in the book? Ten or So Things to Learn This School Year 1. How to talk to your boss 2. How to survive a meeting 3. How to run a meeting 4. How to figure out anything on your own 5. How to negotiate 6. How to make small talk 7. How to explain something in thirty seconds 8. How to write a one-page report 9. How to write a five-sentence e-mail 10. How to get along with coworkers 11. How to use PowerPoint (or Keynote) 12. How to leave a voice mail Prepare for life, not just work "Why Smart People Do Dumb Things" Guy's hard disk problem Reasons Hubris Arrogance Narcissism Unconscious need to fail Maturity Accept yourself Accept others Keep your sense of humor Accept simple pleasures Enjoy the present Welcome work Guy's lesson Why Smart Companies Do Dumb Things Dumb things Consensus Conviction CEOs Experts Good news Lofty ends Guy's list of dumb things Budgets Greed Arrogance Antidotes Squash arrogance and greed Delay consensus Cherish diversity Spell things out Move the crown Restrict experts to narrow areas Ask for bad news Approach budgets as working guidelines Enronomics How to Prevent a Bozo Explosion Take the GBAT (Guy's Bozo Aptitude Test) Score Sheet What to Do 1. Look beyond the résumé 2. Diversify 3. Insist that managers hire better than themselves 4. Eradicate arrogance 5. Understaff 6. Undergrow 7. Merge and purge Almost Every Company Goes Through a Bozo Explosion Are You an Egomaniac? Q: When Does the Big Ego Start ? Q: Why Is Ego an Invisible Line on the P&L? Q: What are the telltale signs of an overinflated ego? Q: Then what is a healthy ego? Q: How can humility survive in a capitalistic, dog-eat-dog market? Q: Is there such a thing as not enough ego? Q: What is your analysis of Steve Jobs? Q: How does an egotist reform himself or herself? Q: What should you do if you work for an egotist? Q: Which of the presidential candidates do you think does the best job of managing his or her ego? Q: How would we change if we did a better job of managing ego? The No-Asshole Rule How to recognize an Asshole Starbucks Text Sutton's Dirty-Dozen List of Everyday Asshole Actions Google Search Method How to Avoid Being an Asshole How to Deal with Assholes Is Your Boss an Asshole? Your boss is an asshole if he Pre-employment homework Pre-employment interview questions You may not be the only one who thinks so The Top Seventeen Lies of CEOs 1. "Working together, we've established our goals." 2. "It's like a startup around here." 3. "Your project will be a skunk works reporting directly to me." 4. "I wanted to do this, but the board wouldn't let me." 5. "I expect you to figure this out." 6. "Our sales pipeline looks good." 7. "We will be profitable soon." 8. "The stock price is not important; what's important is building a great company." 9. "I've never worked with a better group of people." 10. "I'm open to new ideas." 11. "I want to hear the truth; I don't want yes-men around me." 12. "I will gladly step aside when the time comes." 13. "This is how we did it at (name of previous company he was fired from), and it worked." 14. "I don't need to understand all that whiz-bang stuff to be a good CEO." 15. "I don't need to rehearse my speech." 16. "We are a customer-focused company." 17. "I can telecommute and still keep my house on the golf course in Carmel." Rather than these lies, here are four things a CEO should say What's Your EQ (Entrepreneurial Quotient)? Questions Answers What your score means The Reality of Doing Good The Six Lessons of Kiva About Kiva (microloans to entrepreneurs) Lessons 1. Create meaningful partnerships 2. Catalyze and support evangelism 3. Find a business model 4. Bank on unproven people 5. Focus on free marketing 6. Ignore the naysayers Summary Social Entrepreneurship Differences Between Social and for-Profit Organization Founders Differences in the People Who Go to Work for a Social Versus Nonprofit Startup How Do You Keep Score in the Not-for-Profit World? How Can Social Entrepreneurs Attract Talent Is This Why Many Prominent Businesspeople Move Into Social Entrepreneurship? Top Executives Moving From Nonprofit To corporate What Makes Some People Take Action and Others to Just Cogitate? What Things Keep Potential Social Entrepreneurs From Succeeding in Fulfilling Their Potential What Could Government or Society Do to Encourage More Social Entrepreneurship? Who Is the Steve Jobs of Social Entrepreneurship? Scale of entrepreneurism? Summary Making the Transition from the Corporate to Nonprofit World Motivation for Taking a Pay Cut Biggest Adjustment to Your New Role Greatest Differences/Similarities Between Running a Major Corporation and Running a Large Nonprofit How much money does World Vision raise every year? The Distribution of Donations Are you trying to end poverty or evangelize Christianity? How Can People … Make a Difference in the Lives of the Poor? How to Best Help What keeps you awake at night as the CEO of World Vision? What are the biggest hurdles to alleviating poverty? What's the biggest obstacle to getting rich people to care about poor people? Why is World Vision so successful at fund-raising? How has technology affected World Vision's work? What advice would you give to someone who is considering leaving a corporate job to "change the world"? Do the efforts of rock stars and movie stars really help How do you want World Vision to be perceived twenty-five years from now? Summary The Art of Surviving What do people who are undergoing a life crisis need most? What do they need most from their government? What are the key stages of overcoming a crisis? How can people be expected to give back when so much has been taken from them? Can people go beyond and thrive or be stronger than before the crisis? Would thrivers want to repeat the experience? What differentiates who overcome or even thrive vs. those defeated by a crisis? Differences between starting an NPO and a for-profit company Challenges of starting an organization that serves people far away from most supporters What's your step-by-step recommendation for someone who wants to change the world What exactly happens when you win a Nobel Prize? Conclusion My Hindsights in Life Hindsights I 1. Live off your parents as long as possible 2. Pursue joy, not happiness 3. Challenge the known and embrace the unknown 4. Learn to speak a foreign language, play a musical instrument, and play noncontact sports 5. Continue to learn 6. Learn to like yourself, or change yourself until you can like yourself 7. Don't get married too soon 8. Play to win, and win to play 9. Obey the absolutes 10. Enjoy your family and friends before they are gone The older you get, the more you're going to realize that your parents were right Hindsights II 1. Things are never as good or as bad as they seem 2. You can love an adopted child as much as a biological one 3. The key to child delivery is one word: epidural 4. People act the way their last names sound 5. If you think someone is an asshole, then everyone else does, too 6. Life is too short to deal with assholes 7. Entrepreneurs are always a year late and ten times too high in their "conservative" forecast 8. Judge others by their intentions and yourself by your results 9. You don't have to answer every e-mail 10. Don't ask people to do something that you wouldn't do Summary The Reality Check Checklist